It’s hard to achieve anything when you don’t have a plan. Whether it’s preparing for the perfect wedding, a spectacular Christmas lunch or a marathon, you need a plan of action. For your small business, it’s the same. Setting yourself up for success means having a solid and thoughtful business strategy.
Related: How to start a business in Australia
5 steps to set up a surefire business strategy
There are five simple steps to developing an effective strategy for business growth
- Understand where you are now.
- Develop your vision and mission statement.
- Identify your (smart) business goals.
- Put together a plan of action.
- Make a habit of continuous improvement.
Ready to get started? Let’s look at the steps you need to take to plan for success.
1. Understand where you are now
To know where you want to go, you need to understand your current position. So step 1 in crafting an effective growth strategy is to look at your past performance and current situation.
Assess what worked well, what could have been better and what opportunities lie ahead. There are many tools and techniques available to help with this process. A SWOT analysis (strengths, weaknesses, opportunities and threats) is a great way to make this assessment. This handy tool can be applied to an entire business or a single campaign or project.
Specifically, it will help identify your:
This is your competitive advantage, which are the things you do better than your competitors. The knowledge and experience of your employees also could be a strength.
These are the things you need to work on internally to improve your business. This could be done by looking into your own business resources and determining what is needed (or not needed). An example of a weakness is poor cash flow or high rental costs.
These are things that are happening externally that could offer an advantage or opportunity to your business. For example, this could be a rising demand for your products or services.
These are any external factors that could negatively affect your sales and growth. For example, a strong Australian dollar could adversely impact sales.
Since opportunities and threats are often not within the control of businesses, a great framework for looking at external factors is PESTLE which is an acronym for:
You need to ask what opportunities and threats to your business, products or services could arise under each category.
2. Develop your vision and mission statement
Your vision statement describes the future direction of the business and its medium- and long-term goals. A vision also includes a description of your business purpose and values.
A vision is meant to inspire and give direction to the business owner and employees of the business rather than customers.
It helps provide clarity on where you want your business to be in three to five years.
On the other hand, a mission statement is more short-term and provides reasons why the business exists. A mission statement explores elements such as:
- What the business is and does.
- How it brings about its products and services.
- Whom the business serves and who its ideal customers are.
- What value the business and its products/services bring to its customers.
To illustrate an example, Microsoft’s vision and mission statement is:
Vision: “To help people and businesses throughout the world realise their full potential.”
Mission: “Our mission is to empower every person and every organisation on the planet to achieve more.”
You can find more examples of inspiring vision and mission statements here.
3. Identify your (smart) business goals
This is where businesses need to think about some of the high-level objectives they’d like to achieve. It’s important that each goal is SMART, which stands for:
Be specific about the goals you want to accomplish.
Make sure there’s a way you can measure your success. What are the metrics and key performance indicators (KPIs) you’ll track to determine if you’ve met your goals?
This focuses on how important a goal is to you and what you can do to attain it. It’s important to look at goals as a source of motivation, not discouragement.
Focus on something that makes sense with your broader business goals.
Anyone can set goals, but if it lacks realistic timing, chances are it won’t be achieved.
4. Put together a plan of action
Now that you’ve know your mission, vision and business goals, it’s time to put together a plan to make sure your SMART objectives are realised.
And don’t think you need to do this all alone. The plan should involve other departments, functions and suppliers in your business. Once it’s done, the plan should communicate what they need to do and when.
Think of these tactical plans as short sprints to execute your business strategy in practice.
5. Make a habit of continuous improvement
It’s crucial to continuously review all your objectives and action plans to make sure your business has momentum and stays on track.
When your business focuses on continuous improvement, it strives to improve its products or services according to the highest standards. This could be areas of customer service or simplified processes and procedures. This type of ongoing effort is a solid growth strategy, wherever you choose to focus.
Business growth strategies pay off in time
A business strategy plays a critical role in launching a profitable and sustainable business today. As your business changes, your strategy should evolve to ensure the business is growing and still heading in the right direction.
Having your strategy reviewed and up to date will keep you focused and motivated to keep up the momentum.
Remember, creating, managing and reviewing a business strategy requires you to engage the right people to capture all the important elements, so don’t feel like you need to do this alone.